BankFinancial(US:BFIN)2022-05-02 16:00Financial Performance - The company reported net income of $1.3 million, or $0.10 per common share for the quarter ended March 31, 2022[94]. - Net income for the three months ended March 31, 2022, was $1.3 million, compared to $1.5 million for the same period in 2021, with earnings per share remaining at $0.10[116]. - Net interest income decreased by $612,000, with a $276,000 provision for loan losses recorded[98]. - Net interest income increased by $195,000 to $10.8 million for the three months ended March 31, 2022, compared to $10.6 million for the same period in 2021[117]. - Income tax expense was $386,000 for the three months ended March 31, 2022, compared to $517,000 for the same period in 2021, with an effective tax rate of 23.3%[129]. Asset and Liability Management - Total assets decreased by $40.5 million, or 2.4%, to $1.660 billion at March 31, 2022, from $1.701 billion at December 31, 2021[109]. - Total liabilities decreased by $37.0 million (2.4%) to $1.506 billion at March 31, 2022, primarily due to a decrease in total deposits, which fell by $26.8 million (1.8%) to $1.462 billion[114]. - Total stockholders' equity was $153.9 million at March 31, 2022, down from $157.5 million at December 31, 2021, mainly due to a $3.0 million net loss on the U.S. Treasury Note portfolio and the repurchase of 50,000 shares of common stock[115]. Loan and Deposit Activity - Total net loans increased by $10.9 million during the quarter, with total commercial loans and leases rising by $6.7 million (1.4%)[95]. - Total deposits decreased by $26.8 million during the three months ended March 31, 2022[97]. - The company's ratio of nonperforming loans to total loans was 0.18% at March 31, 2022, up from 0.07% at December 31, 2021[101]. - The allowance for loan losses to total loans ratio remained stable at 0.64%[137]. Income and Expense Analysis - Noninterest income decreased by $187,000 primarily due to lower non-usage fees on commercial lines of credit[100]. - Noninterest income increased by $186,000, or 14.8%, to $1.4 million for the three months ended March 31, 2022, compared to $1.3 million for the same period in 2021[126]. - Noninterest expense increased by $102,000, or 1.0%, to $10.3 million for the three months ended March 31, 2022, compared to $10.2 million for the same period in 2021[128]. - Information technology expenses increased by $141,000, or 19.9%, to $851,000 for the three months ended March 31, 2022[128]. Capital Adequacy and Risk Management - The Tier 1 leverage ratio remained strong at 9.32% at March 31, 2022[102]. - As of March 31, 2022, the Bank's Community Bank Leverage Ratio was 10.05%, exceeding the required minimum of 9.00% for capital adequacy[149]. - The Bank targets a Tier 1 leverage ratio of at least 7.5% and a total risk-based capital ratio of at least 10.5%[148]. - The minimum capital conservation buffer (CCB) is set at 2.5%[148]. - The Bank's regulatory capital policies will be adjusted as necessary to maintain compliance with capital requirements[148]. Interest Rate Risk - In the event of a 200 basis point increase in interest rates, the Bank expects a 7.96% increase in net portfolio value (NPV) and an $8.1 million increase in net interest income[158]. - A 25 basis point decrease in interest rates would result in a 2.38% decrease in NPV and a $1.3 million decrease in net interest income[158]. - The Bank has de-emphasized residential mortgage loans and increased focus on nonresidential real estate loans and commercial loans[153]. - The Bank's interest rate risk management involves shortening the average maturity of interest-earning assets to reduce exposure to interest rate changes[153]. - The Bank's dynamic GAP analysis identifies mismatches in the timing of asset and liability repricing[156]. Nonperforming Assets - Nonperforming assets increased by $1.5 million to $2.9 million at March 31, 2022, primarily due to a government lease that was past due over 90 days[138]. - Total nonperforming loans included $330,000 in one-to-four family residential real estate and $101,000 in commercial loans and leases as of March 31, 2022[136]. - The allowance for loan losses as a percentage of nonperforming loans was 345.87% at March 31, 2022, down from 895.33% at December 31, 2021[125].